Mandate Overview02 Mar 2020
To outperform the average of investable peers’ returns i.e. ASISA MA Income category, at risk levels consistent with that of the sector. Given our standard assumptions- , we expect the Fund to deliver real returns of 3% p.a. i.e. CPI+3% p.a. over the long term (net of fees). To minimise the chance of capital loss, investors should expect to invest over periods of at least one year.
- The real return objectives are derived from our long-term real return expectations for a range of asset classes, our expected systematic exposure to those asset classes in each of the funds, and the alpha expected from the managers managing the funds (from security selection and asset allocation).
STANLIB MM Absolute Income comment - Dec 19 - Fund Manager Comment02 Mar 2020
SA bonds returned 0.7% for the quarter while SA cash gained 1.8%. The bond performance was largely driven by the short end of the curve. The 1 to 3-year area rallied 1.2% while longer-dated instruments produced pedestrian returns. The SA 10-year government bond sold-off from 8.08% in June to 8.32% in September as investors demanded a higher return as compensation for SA’s deteriorating fundamentals. Cash held up, producing the highest return relative to other domestic asset classes. Most of this performance was driven by 6- and 12-month NCDs which gained 1.8% and 2.0% respectively. SA inflation fell to 4% early in the quarter, giving the South African Reserve Bank room to cut interest rates in its July meeting.
Equities continued to show signs of weakness in the third quarter, undoing the positive momentum of the first half of the year. Global equities returned 7.3% in rand terms – driven mostly by rand depreciation – while SA equities retreated 5.1%. The sell-off happened in July and August when market participants became more concerned about slowing global trade as a result of the US/China trade war. Property continued to feel the strain of a difficult economic environment and retreated 4.2%.